Background
The assets of Escrow, Trust and Retainer accounts are typically not associated with the operating accounts of the entity managing the escrow, trust or retainer. AccountEdge Pro allows you to manage Escrow, Trust and Retainers in separate accounts. In your company file, you create asset and liability accounts for this purpose. In the Escrow, Trust and Retainers management window, you name the trust, escrow or retainer, associate it with a client, identify the accounts, and receive and disburse funds. If a retainer is being handled as a deposit for goods or services, and you wish to deposit the retainer in your operating bank asset account, AccountEdge Pro will allow you to do this, as well.
When you receive funds into the accounts, both the asset and liability accounts are increased with the received amount. When you Spend an Escrow, Trust or Retainer from the management window, the payment is made from the asset account, and a corresponding debit is made to the liability account. When you receive a payment from the Escrow, Trust or Retainer account for your services, the payment is made from the liability account, and a corresponding journal entry is made, moving the funds from the asset account to your operating account.
If you use the Retainers feature as a deposit for goods and services, the client invoices are paid from the liability account, and the funds are already in your operating account.
Enable
To enable the Escrow, Retainers, Trust feature in AccountEdge Pro, place a check mark to its left in the Preferences (Setup > Preferences > Sales). When the feature is enabled, AccountEdge Pro will add a Retainers, Escrow or Trust entry in the Payments Method list.
You can indicate the default type (i.e., Escrow, Retainers or Trust) to use when new accounts are created, but the type can be changed when you actually create the account.
Initialize
To create a new Escrow, Retainer or Trust account, click the Retainers, Escrows & Trusts button in the Sales Command Center to open the Retainers, Escrows & Trusts list window.
Click the New button
Select Type
Enter a unique name for this account
Enter a description
Link this account to a customer card
You'll need to create a liability account
Select Lists > Accounts from the top of the screen
Select the Liability tab
Click the New button
Type can be Other Liability
Indicate the account number
Tab to, or click in the Name field to name the account
Click OK
If the funds are held in an account that is not your main operating bank account, you'll need to create an asset bank account for the funds (this account must be different than your operating account)
Select Lists > Accounts from the top of the screen
Select the Assets tab
Click the New button
Select a Type of Bank
Indicate the account number
Tab to, or click in the Name field to name the account
Click OK
Select the liability account you created for the Liability Account for Tracking Funds field
Select the bank account you created for the Deposit Funds into Account field, or leave blank if you did not need to create an account
Optionally indicate your replenishment information
Click OK
Receive Funds
To receive funds into the account, click the Retainers, Escrows & Trusts button in the Sales Command Center to open the Retainers, Escrows & Trusts list window; highlight a list item and click the arrow to its left, or the Edit button at the lower, right-hand corner of the window
Click the Receive button to receive funds into the account(s)
In the Receive window, the Deposit to Account will be set to the bank account you indicated
Enter the amount received
Press the tab key on the keyboard until the account and amount fields are populated
Click OK when you're finished
(There is typically no reason to indicate an opening balance in the bank account. This procedure will set both the bank and liability accounts with the fund amount.)
Use/Spend Funds
Spend Trust
You can record fund spending directly in the fund window. To open the window, click the Retainers, Escrows & Trusts button in the Sales Command Center to open the Retainers, Escrows & Trusts list window; highlight a list item and click the arrow to its left, or the Edit button at the lower, right-hand corner of the window
Click the Spend button
In the Spend window, select the Client card
Enter the name of the payee in the Pay to the Order of field
Enter the payment amount
Press the tab key on the keyboard until the account and amount fields are populated
Enter a meaningful statement on the transaction memo line (in yellow check area); this information will display on the Retainers, Escrows & Trust statement
Click Record when you're finished
Invoice/Receive Payment
For the services you've performed for your client, you can invoice and receive payment from the Escrow, Retainer or Trust account.
In the Sales Module, click Enter Sale
Select the client card
Enter usual invoice details and amounts, and click Record
To receive payment, open the Receive Payments window
Select the client
Indicate the amount received
Click the Pay from Retainer button
Select the Payment Method (Retainers, Escrows & Trusts)
Click the Details button to select a specific account, if there is more than one for this client; then click OK
Click Record
You will receive a message indicating the funds for the account are held in a separate deposit account
Click Transfer Money to transfer the amount to your operating account; click Record in the Transfer Funds window
Click No Transfer if no transfer entry should be made
Use Retainer Funds in Operating Account
If funds are being held in your regular operating bank account, and not a separate bank account, you would receive payments for services performed or goods delivered by creating and receiving payment on invoices
In the Sales Module, click Enter Sale
Select the client card
Enter usual invoice details and amounts, and click Record
To receive payment, open the Receive Payments window
Select the client
Indicate the amount received
Click the Pay from Retainer button
Select the Payment Method (Retainers, Escrows & Trusts)
Click the Details button to select a specific account, if thereis more than one for this client; then click OK
Click Record